The transition from locally installed software to cloud-based services is in full swing across the software industry. End-users are becoming increasingly attracted to the distributed cost, billing transparency, and flexible pricing benefits promised by cloud business models. Similarly, software publishers see the benefits of cloud-based delivery, including access to new markets, insight into customer behavior, and revenues derived from innovative licensing models. While the realization of these benefits may vary case by case, one thing is certain: the shift to cloud-based software delivery and consumption presents software publishers and their customers with the opportunity to reap many benefits.
For the end user, adoption of cloud-based software services is a major upgrade over the traditional installation model because it saves time and money. Additionally, the consumption-based license model associated with most SaaS (News - Alert) applications allows customers to only pay for what they use rather than being forced to purchase full suites of products that include features and functionality that aren't necessary for their core business, a point that Russ Hubbard, a corporate VP at software rights management vendor SafeNet (News - Alert), noted in his recent blog post “Change is Hard, Even for Software Companies.” Essentially, the customer can get more meaningful functionality at an equivalent cost using today’s SaaS-based solutions.
Consumption-based software pricing and licensing models also benefit software publishers. By enabling customers to purchase the exact products and features they need, software publishers not only increase customer satisfaction, they dramatically broaden the market they can reach with their services.
In addition, with SaaS licensing, customers and publishers don't have to worry about the installation and management headaches associated with updating and upgrading software. SaaS-based delivery eliminates the labor-intensive processes associated with traditional on-premises models, making updates completely transparent to the end-user and therefore much less painful. With SaaS licensing, publishers don't have to mail out additional software and the customers don't have to install it.
Additional benefits for both parties include faster fulfillment and greater customer satisfaction. SaaS publishers also get improved end-user visibility, which can create terrific up-selling and cross-selling opportunities.
SaaS licensing also gives software publishers the tools to streamline their back office and concentrate on their core competencies, rather than being bogged down with the inherent difficulties surrounding manual licensing.
One thing that publishers will need to become accustomed to is the new pay-as-you-go sales process. In this scenario, the "big deal" is replaced with a slow, steady stream of revenue. While this may take some getting used to, it provides companies with a greater level of security and understanding of their revenue streams, says Hubbard.
To make the most of cloud-based delivery, software publishers need a comprehensive SaaS licensing and management solution that —among other things – enables flexible packaging, enforces compliance with service contracts, and collects important usage data, all of which are vital to maximizing revenue and making the most from developed software.
Sentinel Cloud Services from SafeNet is the industry's leading solution for building SaaS licensing platforms. Click here for more information.
Edited by Rich Steeves